Unicredit: Orcel’s three options on Commerzbank

Commerzbank “is currently an investment and nothing else. It should not be talked about in other terms. Of course, at the moment we are a significant shareholder, a strategic shareholder but it remains an investment”. The CEO of Unicredit Andrea Orcel is cautious and does not rush ahead in Unicredit’s operation on the second German bank, clearly stating however that the move “is a test for Europe”. It is the first time that the banker has spoken after the purchase of a potential 21% of the German institute and outlines the three options that are on the table.

ORCEL’S THREE OPTIONS
At the moment, he explains while speaking at the annual conference of financial CEOs organized by Bank of America, “all scenarios are open”. The investment in Commerzbank was made because the German bank “fits our parameters”. Three, as mentioned, the scenarios: “We stay as we are and help Commerzbank express the unexpressed value that we believe there is. Two, we find a way to do something bigger, but to do it both parties must agree”. Third scenario, if the operation does not work “we sell and the extra capital that we will find ourselves with we will distribute to the shareholders”.

Orcel stressed that “we do not need to do something together” with Commerbank, “we are not forced to do something on terms that we are not convinced by.” These three scenarios are open and at the moment “there is not one that prevails.”

UNICREDIT WILL NOT ASK FOR COMMERZBANK BOARD OF DIRECTORS
Another important point is that Unicredit will not ask for seats on the board of directors of the German institution. “I do not believe that investors should have seats on the board and in this case it would also be inappropriate because we are also a competitor,” he added. The model for Commerzbank would be HVB, the German subsidiary of the Italian institution, Orcel explained at the annual conference of financial CEOs organized by Bank of America. However, he reiterated, the operation on Commerzbank must involve all stakeholders.

2024 GUIDANCE REVISED UPWARDS AND UNICREDIT SHARES UPWARDS
The CEO then revised upwards the guidance on 2024 profits which made the stock rise on the stock exchange (+1.83%). Unicredit aims for a 2024 profit above 9 billion euroshe said confirming 8.6 billion of distribution to shareholders in 2024 while in 2025 and 2026 this figure will be exceeded. The payout in fact from 2025 onwards will increase from 40% to 50% of the profit, he highlighted.

GERMANY CONTINUES TO STAND UP AGAINST THE OPERATION
Germany is calling for “maximum possible independence for Commerzbank,” Bloomberg reports. “We are looking at how to find a solution that is good for Commerzbank and very good for the federal government, while respecting the independence of Commerzbank,” said State Secretary for Finance Florian Toncar at the end of a hearing in the German parliament’s finance committee on the government’s sale of 4.5 percent of Commerzbank to Unicredit.